CMHC to hike Mortgage Insurance Premiums

The cost of mortgage default insurance is about to go up for most consumers after Canada Mortgage and Housing Corp.’s decision to raise premiums. The federal agency announced today that it is increasing premiums across the board, effective May 1. The change does not impact existing homeowners and is expected to raise up to $175-million for CMHC.

At the top end of the market for someone with a mortgage for 95% of the value of their home, the premium CMHC charges will go from 2.75% to 3.15%. 

On a $450,000 mortgage, the fee — it is charged up front and often tacked onto the mortgage, would rise from $12,375 to $14,175.

CMHC controls about 70% of the mortgage default insurance market in Canada with private players Genworth Canada and Canada Guaranty holding the rest. Genworth announced it too would raise premiums across the board by an average of 15%. Its increases will take effect May 1 too.

Let's get your client's to move in before Wednesday April 30th 2014 to avoid paying extra payments if doing less then 20% down payment.

Thanks

Mihir

--

Mihir Oza

647-710-7374
Mortgage Agent (License # M11000672)
The Mortgage Practice (Brokerage # 11156)

 

My Motto: Right Advice. First Time, Every Time.